BA Boeing Co

By Robert Wall 

LONDON-- Airbus Group SE is expected to name its commercial-plane unit boss Fabrice Brégier to the newly created role of group chief operating officer, according to people familiar with the matter.

It is the latest move by Chief Executive Tom Enders to tighten control at the world's No. 2 plane maker which, along with rival Boeing Co., is under pressure to deliver all the planes promised to airline customers.

The appointment could help Mr. Enders hold on to Mr. Brégier, a key operational lieutenant and likely successor, one of the people said. The Airbus chief executive's current mandate expires in 2019, though it could be extended.

Mr. Brégier currently oversees the commercial airplane unit that delivers most of the company's profit. When Mr. Enders ran the jetliner business, Mr. Brégier was his chief operating officer.

The appointment, first reported by Reuters, could be announced in coming weeks. It is part of the restructuring Mr. Enders has undertaken at Airbus, where he has combined the company's space and defense units and more closely integrated its legal and communications functions. Airbus could announce more changes next month, one of the people said.

Mr. Bregier's expected elevation comes as the rivalry between Airbus and Boeing, the world's largest plane maker by deliveries, intensifies. Airline orders for new planes have slowed, adding pressure on the plane makers to cut costs so they can lure new customers with discounts. On the factory floor, both are scrambling to make good on their record order books.

That shift has put extra importance on operational roles at the plane makers. Boeing has been restructuring under its new chief executive Dennis Muilenburg, who took the top job last year. Mr. Muilenburg, who previously ran the Chicago-based company's defense business, has refreshed Boeing's executive ranks and taken more direct oversight over critical supply-chain operations and development work.

Managing suppliers, in particular, has become increasingly critical for Boeing and Airbus. Despite a slowdown in new deals, the two plane makers have built a massive backlog of planes yet to be delivered after several years of strong sales. That is put pressure on the plane makers and their suppliers to crank up output. Some suppliers have already stumbled, jeopardizing the delivery commitments the plane makers have made to customers.

The financial stakes can be high. Airbus cash flow in the first year slumped after supplier bottlenecks caused plane deliveries to be delayed. The Toulouse-based plane maker has vowed to catch up by year-end.

United Technologies Corp. said last week that the company's Pratt & Whitney aircraft-engine unit is likely to ship only 150 of its newest family of commercial jet engines, known as the geared turbofan. It previously targeted about 200 deliveries this year.

The delay is having a knock-on effect on Airbus deliveries. Its A320neo single-aisle plane uses the Pratt engine and one from a rival consortium. Airbus this week said it would still meet its delivery guidance of shipping at least 650 aircraft, in part by handing over more of an older version of the A320.

Mr. Brégier, who already sat on the group's executive committee, has experience throughout Airbus's operations. Before taking the top job at the aircraft making unit that produces planes such as the A380 superjumbo and popular A320 single-aisle plane, he ran the company's helicopter operations. Before that, he was involved in the defense sector, running the European MBDA missile joint venture owned by Airbus, as well as Britain's top weapons maker BAE Systems PLC and Italy's Leonardo-Finmeccanica SpA.

Write to Robert Wall at robert.wall@wsj.com

(END) Dow Jones Newswires

September 21, 2016 08:04 ET (12:04 GMT)

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